By this time even banks are now aware that social media is big and is here to stay. But just how do banks leverage the trend to their advantage? In this post, I will discuss some of the challenges faced by banks in creating an effective social media program.
Here are some of the banks challenges and counters to them
Bank Executives Don't Understand Social Media
There is still true fear on the part of many bank executives that someone will say the wrong thing in a post or Tweet that may damage their reputation or put them in regulatory trouble in the strictest regulatory environment ever.
Counter: While there is always a possibility of offending someone nowadays when you say anything, staying silent is not really a strategy. As we all know in social media people will be talking about you anyway so why not at least voice your viewpoint. If you are dilligent enough to put the proper controls in place the risk can be mitigated. Besides, remember social media is here to stay so you need to figure this out and get good at it.
ROI Difficult to Prove
Depending on the social media program it can be very difficult to measure the hard benefits to the bottom line. In a business environment where costs are closely scrutinized this is a barrier to implementing any program. While the start up costs can be done very inexpensively since many of the tools are free going it alone without experienced professionals doesn't leave much chance for success.
Counter: ROI is always difficult to calculate not just in social media. The best approach is to define your goals for the project and establish metrics to measure it. The main problem occurs when your not sure what the benefit will be. If this is the case, don't do it.
One strategy I am seeing regularly is companies (not just banks) trying to buy their friends. Offering free iPads or other prizes if you like them. This works from the standpoint of getting followers since most people will comply to get something for free but it doesn't build a loyal following for long term value. These same people will unlike you quickly when the marketing begins. Giveaways should be used strategically.
The good news is that for Social Media the tools have come a long way as the market has matured. Companies like Raven's Social Media Tools can provide real time data to help you monitor and participate in the conversation, as well as insight to help you spot trends and report on them. In short, there are more tools readily available to help you measure your goals. If you can tie those together, with internal data on products, sales or other indicators you should be able to get a better picture.
Boring and untrusted
Banking is a boring business and for the most part banks do a great job of making it even sleepier. On top of that the bigger banks are not trusted or even hated which represents risk for them. What do they use for content on their tweets or posts that is interesting and won't offend the masses?
Counter: Taking two examples of big banks on facebook. If you go to Chase they have a boring page with their basic information and history and no posts on their wall.not much value here, it is a case of just establishing a presence only. If you go to Bank of America on facebook it is a lot more lively. It wisely plays on Building Opportunity from Bank of America slogan and has posts about the activities they are involved in the communities. I see some negative comments lashing out but also counter points from people responding about the negativity on a positive story.
In this harsh regualtory environment, there is definite concern that banks could take a hit from regulators for many reasons. To truly leverage the more advanced analytics where you go beyond matching targeted ads to basic criteria to leveraging demographic data collected via social media there is risk with potential for issues when profiling customers and sending them to specific products.
Counter: For advanced social analytics beyond the basic seek the guidance of experienced professionals. Even at the basic level, don't go it alone. Find an expert to help you set up a program if your going to do more than establish a basic social media presence.